Business Process Management ELSE_bpm-john_Prelims.qxd 2/27/2006 3:41 PM Page i i To our families Yvonne, Brittany, Connor, Cassie and Kurt and Sandra, Angelique and Mystique Without the support and inspiration of our families this would not have been possible; we know it has been tough at times, your understanding will never be forgotten. Thank you. We will now endeavor to make up the time we have lost with you. John and Johan ELSE_bpm-john_Prelims.qxd 2/27/2006 3:41 PM Page ii ii Business Process Management Practical Guidelines to Successful Implementations John Jeston and Johan Nelis A MSTERDAM B OSTON H EIDELBERG L ONDON N EW Y ORK O XFORD P ARIS S AN D IEGO S AN F RANCISCO S INGAPORE S YDNEY T OKYO B UTTERWORTH -H EINEMANN IS AN IMPRINT OF E LSEVIER ELSE_bpm-john_Prelims.qxd 2/27/2006 3:41 PM Page iii iii Butterworth-Heinemann is an imprint of Elsevier Linacre House, Jordan Hill, Oxford OX2 8DP, UK 30 Corporate Drive, Suite 400, Burlington, MA 01803, USA First edition 2006 Copyright © 2006, John Jeston and Johan Nelis. Published by Elsevier Ltd. All rights reserved. The right of John Jeston and Johan Nelis to be identified as the authors of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988 No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permis- sion of the publisher Permissions may be sought directly from Elsevier's Science & Technology Rights Department in Oxford, UK: phone (+44) (0) 1865 843830; fax (+44) (0) 1865 853333; email: permissions@elsevier.com. Alternatively you can submit your request online by visiting the Elsevier web site at http://elsevier.com/ locate/permissions, and selecting Obtaining permission to use Elsevier material Notice No responsibility is assumed by the publisher for any injury and/or damage to persons or property as a mat- ter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. Because of rapid advances in the medical sciences, in particular, independent verification of diagnoses and drug dosages should be made British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record for this book is availabe from the Library of Congress ISBN-13: 978-0-7506-6921-4 ISBN-10: 0-7506-6921-7 Printed and bound in Great Britain 06 07 08 09 10 10 9 8 7 6 5 4 3 2 1 For information on all Butterworth-Heinemann publications visit our web site at books.elsevier.com ELSE_bpm-john_Prelims.qxd 2/27/2006 3:41 PM Page iv iv Contents Contributors xi Foreword xiii Preface xvii Introduction xix Acknowledgements xxiii Part I Frequently asked questions 1 Chapter 1 How can we demystify business process management? 3 Brief history of business process management 3 The next big thing (or how mystification begins) 4 BPM hype cycle 4 What is mystifying about BPM? 5 The iceberg syndrome 5 Exploring ‘reality’ 7 Change management and performance measurement 8 Conclusion 8 Chapter 2 What is business process management? 9 Chapter 3 Why is it important to improve business processes before automating them? 12 So, what’s the problem? 12 Why isn’t this working? 13 Why do automated solutions fail to deliver expected benefits? 13 What have we learned from history? 14 Conclusion 15 Chapter 4 When should you do BPM – what are the main drivers and triggers? 16 ELSE_bpm-john_Contents.qxd 2/28/2006 5:09 PM Page v v Chapter 5 Who should be involved in BPM? 20 Management of business processes 20 Use of external BPM experts 23 Chapter 6 Why are organizational strategy and process architecture important in BPM implementation? 25 Organization strategy 25 Process architecture 27 Chapter 7 How do you sell BPM technology to the organization? 29 Who is buying BPM technology? 31 Who is selling BPM technology? 33 Chapter 8 What are the critical success factors in a BPM project? 34 Chapter 9 What are the critical implementation aspects for a BPM solution? 38 Chapter 10 Why do you need a structured approach to implementing BPM? 40 Conclusion 44 Part II The framework 45 Chapter 11 Framework overview 47 The BPM implementation framework 50 Organizational approach to BPM implementations 51 Framework phases 53 Project essentials 55 A process-centric organization 57 Chapter 12 Guidelines on how to use the framework 59 Why a ‘one approach fits all’ philosophy does not work 59 How are BPM projects selected? 60 Four scenarios in implementing BPM 62 How to determine which scenario is applicable 62 Skipping of a phase 63 Iterative approach 64 Chapter 13 Organization strategy phase 66 Why? 66 Why involve strategy in BPM? 67 Results 69 How? 69 Organization strategy outputs 78 Organization strategy phase risks 79 Chapter 14 Process architecture phase 80 Why? 81 What is process architecture? 83 Results 84 How? 85 Realize value 98 vi Business Process Management ELSE_bpm-john_Contents.qxd 2/28/2006 5:09 PM Page vi Process architecture outputs 98 Process architecture phase risks 98 Chapter 15 Launch pad phase 100 Why? 100 Results 102 How? 102 Realize value 121 Launch pad phase outputs 121 Launch pad phase risks 123 Chapter 16 Understand phase 124 Why? 124 Results 125 How? 125 Realize value 140 Understand phase outputs 140 Understand phase risks 141 Chapter 17 Innovate phase 143 Why? 143 Results 144 How? 145 Realize value 165 Innovate phase outputs 165 Innovate phase risks 166 Chapter 18 People phase 167 Why? 167 Results 168 How? 169 Realize value 184 People phase outputs 184 People phase risks 184 Chapter 19 Develop phase 187 Why? 187 Results 189 How? 190 Realize value 201 Develop phase outputs 201 Development phase risks 203 Chapter 20 Implement phase 204 Why? 204 Results 205 How? 206 Realize value 213 Implement phase outputs 213 Implement phase risks 214 Contents vii ELSE_bpm-john_Contents.qxd 2/28/2006 5:09 PM Page vii Chapter 21 Realize value phase 215 Why? 215 Results 217 How? 217 Critical success factors 226 Realize value phase outputs 227 Realize value phase risks 228 Chapter 22 Sustainable performance phase 229 Why? 229 Results 230 How? 230 Realize value 243 Sustainable performance phase outputs 243 Sustainable performance phase risks 243 Chapter 23 Essentials introduction 245 Chapter 24 Project management 247 Why? 247 Results 250 How? 250 Project management risks 266 Chapter 25 People change management 267 Step 1: Resistance to change 269 Step 2: Why change and leadership’s role? 270 Step 3: Components of the change program 272 Step 4: Getting ready for change 276 Step 5: Required behavior 278 Step 6: How do you get there? 279 Chapter 26 Leadership 282 Why? 282 How? 283 What is leadership in the context of a BPM program/project? 283 Summary 293 Part III BPM and the organization 297 Chapter 27 BPM maturity 299 Introduction 299 Business process management maturity 300 The BPM maturity model 303 Application of the BPMM model 313 Related work 314 Summary 315 Chapter 28 Embedding BPM within the organization 316 Why do we need a special BPM organization structure? 316 viii Business Process Management ELSE_bpm-john_Contents.qxd 2/28/2006 5:09 PM Page viii What are the results of embedding BPM into the organization? 317 Ownership of processes 327 Part IV: Appendices – tools and techniques 329 Appendix A: Organization strategy phase 331 Checklist: Organization strategy phase 331 Self-assessment strategy 332 Appendix B: Process architecture phase 340 Checklist: Process architecture phase 340 Sample architecture 341 Appendix C: Launch pad phase 344 Checklist: Launch pad phase 344 Project team structure and roles 345 Business case template 349 Sample report structure 351 Project plan schedule 352 Appendix D: Understand phase 358 Checklist: Understand phase 358 Overview of process model levels 359 Understand workshop – initial workshop presentation 365 Modeling guidelines 367 Issues and opportunities register 368 Appendix E: Innovate phase 370 Checklist: Innovate phase 370 Innovate executive kick-off workshop 372 Steps of an Innovate workshop 373 Questions for an Innovate workshop 377 Innovate case study 379 Sample process gap analysis 383 Appendix F: Develop phase 384 Checklist: Develop phase 384 Components of an automated solution 385 Appendix G: People phase 392 Checklist: People phase 392 Appendix H: Implement phase 394 Checklist: Implement phase 394 Training guidelines 395 Appendix I: Realize value phase 398 Checklist: Realize value phase 398 Benefits tracking matrix 400 Contents ix ELSE_bpm-john_Contents.qxd 2/28/2006 5:09 PM Page ix . covering project management, business process management, business process reengineering, systems development, outsourcing, consulting and general management. . questions 1 Chapter 1 How can we demystify business process management? 3 Brief history of business process management 3 The next big thing (or how mystification